Becoming a Licensed Producer of Recreational Cannabis

Four Tips For Getting a Commercial Cannabis License 

With an abundance of consumer demand and money to be made, many people are trying to break into the recreational cannabis business. However, becoming a licensed producer of recreational cannabis is complicated and expensive, especially for multistate operators. In order to legally operate as a licensed producer of recreational cannabis, you’ll need to do a lot of planning and legal paperwork, and cultivate a great deal of patience every step of the way. Here are four tips on the different aspects of the business and what you need to consider if you’re planning to apply for a commercial cannabis license. 

  1. There are Different Commercial Cannabis License Fees: The competition for commercial cannabis licenses can be a major challenge for players wanting to get into the game. The fees to obtain a cannabis growing license will vary widely from state to state, requiring a lot of capital upfront. The license fees alone place most people at a disadvantage over larger corporate operations. Many states are addressing this disparity by reserving a certain number of cannabis cultivation licenses specifically for women-owned cannabusinesses, and for communities historically disadvantaged by the criminalization of cannabis.
  2. There are Multiple Types of Cannabis Licenses to Consider: A cannabis cultivation license allows your operation to grow a certain number of plants to sell to consumers in a retail setting, like a dispensary or recreational cannabis store. A cannabis manufacturing license would be used for companies that grow cannabis and extract CBD and THC from the plant and its buds. This extraction is then used to produce infused edibles, capsules, oils, tinctures, and cartridges for wholesale to dispensaries and recreational cannabis stores.
  3. Cannabis Cultivation is Just One Aspect of the Marketplace: Whether you plan to grow cannabis, become a licensed producer of recreational cannabis to manufacture products like edibles, there are many other important businesses serving the marketplace. Different states have varying labeling and packaging requirements, so specialist printers and packaging manufacturers are thriving. There are many other ancillary businesses in the cannabis marketplace, from payment processors to app builders and advertising agencies, so there are a variety of ways to break into the business without ever touching a plant.
  4. A Criminal Record Can Be a Barrier to Entry: Since cannabis remains illegal on a federal level, every state makes its own laws for commercial cannabis licenses. In some states, any criminal record involving cannabis—even an arrest without a conviction—can bar a person from entering the legal cannabis marketplace. While many states are addressing the issue through the expungement of minor cannabis offenses from the records, the application processes can be difficult and time-consuming. 

If you’re interested in becoming a licensed producer of recreational cannabis, you’ll need to learn the laws of the primary state where you plan to operate, cultivate, or manufacture cannabis products. Cannabis Business Times magazine has a helpful state-by-state guide to cannabis cultivation licensing and the application fees.